5 Strategies to Manage Your Company’s Water Risk

August 9, 2018

Water is arguably our most precious resource. It is requisite for the survival of all life on our planet. It is also finite. While water is endlessly recyclable through the hydrologic cycle, there’s only so much of the stuff, and only about 1% of it is freshwater that is usable for human consumption.

Beyond its fundamental role in our survival, water also plays a key function in any number of planetary and business activities. Water is essential for global food production. Water, and the hydrologic cycle, is responsible for driving global weather patterns. Water is a primary ingredient in the creation of fossil fuel generated electricity. Water is a crucial element in health and sanitation. Water is used in many of the manufacturing processes that provide us with consumable goods. Water allows us to ship these goods around the world. Water drives global tourism and provides a source of recreation and relaxation.

And our water is in trouble.

Water Risk is the Next Resource Frontier

Globally, water faces numerous challenges that in turn are impacting business. Namely:

There are already more than 1 billion people without access to adequate water, and demand is expected to increase by more than 50% by 2050. Much of this future demand is attributable to the food resources that will be required to feed a growing population.
Water resources are under threat from a variety of pollutants, including pathogens, viruses, carbon dioxide, phosphates and other toxins. These contaminants violate water safety, but also contribute to larger problems, such as the acidification of the oceans (which in turn destabilizes oceanic ecosystems) and algal blooms.
An intrinsic part of the hydrologic cycle, global warming is accelerating evaporation. This is resulting in an increased frequency, duration and severity of drought. Increased evaporation also leads to increased water vapor in the atmosphere, leading to more severe and less predictable precipitation. These extreme evaporative events can have significant implications for business, disrupting operations and global supply chains.

Reducing Resource Risk with Water Security Solutions

CDP has found that water risk impacts nearly every industry sector. The good news is that businesses are coming to understand those risks. In 2017, CDP saw a 193% increase in companies disclosing their water risk and water security solutions.

Here are five top suggestions for how businesses can act on water risk and ensure the availability of water resources for years to come:

Measure and reduce your footprint. An important first step for any business is to determine its water consumption baseline and begin tracking utilization, using a software like EcoStruxure™Resource Advisor. Not every company uses water in the same way, and tracking utilization helps businesses determine where and how to concentrate their reduction and efficiency efforts.
Rethink processes. A water audit can help identify where water is used in a business. But making real change may require thinking beyond existing processes and products. How can your business reimagine its use of water? Are there steps in the production process that use water that could be reinvented, or even eliminated? Are there new, more efficient technologies that could help you achieve your water reduction goals? Could existing, water-intensive materials be replaced with other ingredients?
Invest in water recycling. Leading companies—including Kimberly-Clark Corporation, Alcoa, Gap Inc., and others—invest in, or work with suppliers who invest in, water recycling, collection, and treatment facilities as part of their operation. Whether this includes collecting rainwater, repurposing gray water, or cleaning/filtering water for reuse, the results speak for themselves: with its Australian filtration system, Alcoa has been able to reduce freshwater withdrawals by more than 300 million gallons per year.
Set science-based carbon reduction targets. Global warming is a key driver behind many water challenges. Acting as quickly as possible to reduce atmospheric greenhouse gases can help keep the impacts of global warming to a minimum and reduce evaporative stress on water resources. Companies can set a science-based carbon reduction goal to begin the process of decarbonizing their operations at a level consistent with existing climate science.
Make the switch to renewable energy. Renewable energy is a primary means to achieve science-based carbon reduction goals. Renewables also help reduce water risk because they require almost no water to produce or transport electricity.